If Quality-Detection Costs Are Very Low

question 167

Multiple Choice

If quality-detection costs are very low,

• A) low quality products will tend to be withdrawn from the market, and the average quality will rise.
• B) low quality products will tend to be withdrawn from the market, but the average quality will fall.
• C) high quality products will tend to be withdrawn from the market, and the average quality will rise.
• D) high quality products will tend to be withdrawn from the market, and the average quality will fall.

Grasp the concepts of direct and indirect messages and their underlying purposes.

Learn how to respond to customer complaints effectively.

Gain knowledge on the strategic opening and closing of business communication.

Understand the different types of individual incentives and their applications.

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Definitions:

Subjective Impossibility

A situation in which it is impossible for an individual to perform a contractual duty due to personal inability or circumstances, despite the task being objectively possible.

Frustration Of Purpose

A defense in contract law that may excuse parties from their obligations if an unforeseen event undermines the contract's original purpose.

Condition Precedent

A condition or event that must occur before a contract or a specific provision within a contract becomes effective or enforceable.

Illusory Promise

A statement or promise that is misleading or lacks the necessary intent to be legally enforceable.